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Financial Accounting HW




For the following situations, indicate whether each involves a deferred expense (DE), a deferred;revenue (DR), an accrued liability (AL), or an accrued asset (AA).;Example: DE Office supplies purchased in advance of their use;1. Wages earned by employees but not yet paid;2. Cash collected from subscriptions in advance of publishing a magazine;3. Interest earned on a customer loan for which principal and interest have not yet;been collected;4. One year?s premium on life insurance policy paid in advance;5. Office building purchased for cash;6. Rent collected in advance from a tenant;7. State income taxes owed at the end of the year;8. Rent owed by a tenant but not yet collected;Determine whether recording each of the following adjustments will increase (I), decrease (D);or have no effect (NE) on each of the three elements of the accounting equation.;Assets = Liabilities + Stock. Equity;Example: Wages earned during the period but not yet paid;are accrued. NE I D;1. Prepaid insurance is reduced for the portion of the policy;that has expired during the period.;2. Interest incurred during the period but not yet paid is accrued.;3. Depreciation for the period is recorded.;4. Revenue is recorded for the earned portion of a liability for;amounts collected in advance from customers.;5. Rent revenue is recorded for amounts owed by a tenant;but not yet received.;6. Income taxes owed but not yet paid are accrued.;The steps in the accounting cycle are listed in random order. Fill in the blank next to each step to;indicate its order in the cycle. The first step in the cycle is filled in as an example.;Order Procedure;Prepare a work sheet.;Close the accounts.;1 Collect and analyze information from source documents.;Prepare financial statements.;Post transactions to accounts in the ledger.;Record and post adjustments.;Journalize daily transactions.


Paper#77335 | Written in 18-Jul-2015

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